In a sign that the recent focus on ad-blocking technology and moves to address online advertising fraud have been more than white noise, Israeli tech marketing play Adgorithms (ADGO:AIM) dives 58.7% to 52p on a significant profit warning.
Today's news flies in the face of our optimism about the story - which floated at 133p in June - and suggests developments such as Apple's (AAPL:NDQ) decision to add ad-blocking software in its App store is having a significant impact. Adgorithms - which has developed 'Albert' an artificial intelligence platform which manages online campaigns - says that 'in recent weeks the online advertising market has experienced severe disruption, resulting in a loss of supply for major online advertising exchanges and a drop in demand from major media buyers'.
As a result of what it describes as an 'significant effect on indirect revenue generation' it says earnings for the full year will be 'materially below market expectations'.
House broker Liberum puts its price target under review and slashes its forecasts for 2015 revenues expected at $23 million against a previous forecast of $38.6 million and earnings before interest, tax, depreciation and amortisation (EBITDA) from $10 million to just $3 million.
We plan to look at the ad-blocking story and its impact on the ad tech sector in more detail in a forthcoming issue of Shares.